Section 17138 Of Article 3. Items Specifically Excluded From Gross Income From California Revenue And Taxation Code >> Division 2. >> Part 10. >> Chapter 3. >> Article 3.

. Any amount received as a rebate or voucher from a local water or energy agency or supplier for any expenses the taxpayer paid or incurred for the purchase or installation of any of the following devices shall be treated as a refund or price adjustment of amounts payable to that water or energy agency or supplier:
  (a) A water conservation water closet that meets the performance standards of American National Standards Institute Standard A112.19.2 and uses no more than 1.6 gallons per flush, or for the installation of a urinal that meets the performance standards of American National Standards Institute Standard A112.19.2 and uses no more than one gallon per flush.
  (b) A water and energy efficient clothes washer that meets a 1.04 modified energy factor and 9.5 water use efficiency factor as determined by the State Energy Resources and Conservation Commission.
  (c) A plumbing device necessary to serve the recycled water uses described in Sections 13553 and 13554 of the Water Code.